Yeah, it means "ubuntu" font is not shipped with 10.04. And its used in my default config.Try to change it to some other font from fc-list (for ex. Arial, preferably without spaces in name because there is bug in PMS with font names escaping) and see if it makes a difference.

Very strange. Looks like severe bugs on 10.04 version of mencoder. Maybe other 10.04 users can confirm / deny these issues. 11.10 works fine for me, no font problems. Do you try system reboot? Simple, but sometimes very effective Whats your system RAM size?

1. My bad. I misread your explanation and thought that "mencoder_remux_mpeg2 = false" gave you problems. Please try decreasing transcoding buffer down to 200 Mb and try remuxing again.2. Can you upload sample of this file to mediafire or send me PM link?